Brandon Turbeville
December 4, 2013
The United States today finds itself in the midst of a
crisis which exists on a multitude of different levels. From the establishment
of a culture of constant warfare, increasing environmental degradation, and the
devolution into an outright police state, the perils of the current system are
easily visible to those with eyes to see.
Nowhere, however, is the crisis more
visible than in the manifestations of the world economic depression.
From mass unemployment (estimated at approximately 25% when
all factors are considered) and a growing national debt to a ballooning trade
deficit and the loss of purchasing power of the dollar as well as decrepit and
crumbling national infrastructure, the United States today faces a crisis of
epic proportions.
Most of the blame for this economic calamity, of course, can
be directly traced back to the treachery of private bankers, Wall Street, and
the practice of usury combined the acts of the agents of these financiers in
the halls of government at some point or other. Ever since the Federal Reserve
was solidified as the perceived national bank of the United States, the most
powerful nation on the face of the earth and, thus, its people, were placed
under the rule and at the mercy of private bankers. The economic health and future
of the United States was placed in the hands of the very elitists and
financiers from which the American people should have been protected. As a
result of the Federal Reserve Act of 1913 and subsequent policy, the power of
issuing currency and credit, the ability to cause mass inflation or deflation,
and the opportunity to orchestrate booms and busts, productivity and
depression, was placed in the hands of private bankers who were granted the
authority to act completely independent of the authority of the United States
Federal government. Thus, the U.S. Federal government has now been reduced to
reacting to the decisions made by the private Federal Reserve instead of the
Federal Reserve acting as a truly national central bank and reacting to the
decisions made by the Federal government.
Although criticism of the Federal Reserve system has existed
since 1913, both the criticism and the level of knowledge surrounding the
history and purpose of the institution has increased to such a scale never
before witnessed. With an understanding of the unconstitutional abrogation of
Congressional authority, the massive amount of control now held by private
bankers, and the current economic conditions that have resulted, many informed
Americans have rightly become antagonistic toward the Federal Reserve and have
adamantly called for changes to be made to the system.[1]
Ending the Fed, however, while sounding euphonious and
clever, would nonetheless be a disastrous policy for the United States and the
American people as it would immediately usher in an age of austerity while
doing absolutely nothing to reduce the amount of control private bankers and
the cartel masquerading as the national bank currently have over the U.S.
Federal government.
Simply ending the fed would, in one fell swoop, eliminate
the “buyer of last resort” option for US national debt and cause the collapse
of the American economy. In addition, although the Federal Reserve does not
currently serve in its proper function as provider of credit and funding for
the US government, ending the Fed will eliminate a major source of funding,
leaving taxation as the only method of income. If the Federal government wishes
to borrow money, outside of printing more of it and throwing itself into an
inflationary spiral, it will then be forced to borrow directly from Wall
Street, the very same money lenders who will immediately regain control over
the issuance of currency, the amount in circulation, and economic cycles. Thus,
before the offices of the Federal Reserve board are cleaned out, private
bankers will have already regained control over the operation of the government
as a whole.
Still, the question remains as to how to end the power of
the Fed (i.e. the private bankers) as it exists, return the Constitutional authority
over monetary policy back to Congress, and break the power of wealthy
financiers and banking cartels over the Federal Government.
The answer to that question is not to simply end the Fed but
to nationalize it. Nationalizing the Federal Reserve would not only return
Congressional power to its rightful place as guaranteed in the U.S.
Constitution and break the power of Wall Street over the monetary policy of the
United States, but it would also provide the opportunity to eliminate debt,
reduce inflation, improve infrastructure, jumpstart a recovery, and usher in a
new era of scientific progress the likes of which the world has never seen.
Thus, it is not wise in any real sense so much as it is
possible to end the Federal Reserve system nor is it likely that one would gain
any element of true populism by simply demanding that we “End the Fed,”
particularly due to the age of austerity and the parallel banker control that
would inevitably result from such a policy. It is imperative to offer
legitimate solutions and a clear way forward when making a political demand.
For that reason, it is the Nationalization of the Fed that should be demanded, not the simple abolition of it.
For that reason, it is the Nationalization of the Fed that should be demanded, not the simple abolition of it.
With that being said, at least three aspects to the
nationalization of the Federal Reserve must be explained in order to justify
it. These points are as follows:
1.) How to
Nationalize the Federal Reserve
Although the specific manner in which the Federal Reserve is
nationalized should not be the main focus of the action and demand to do so,
there are two possible ways that such an undertaking could be accomplished. The
first, and most desirable, is the passage of a law by Congress which
nationalizes the Federal Reserve under the U.S. Department of the Treasury. This
method is the best case scenario as it demonstrates Congressional will, common
agreement, and process legitimization. However, in the absence of Congressional
will, there exists the forceful act of the Executive. Essentially, it is
entirely possible for the Federal Reserve to be de facto nationalized by a
simple Presidential phone call to the Chairman of the Fed demanding specific
lines of credit for specific purposes with clear repercussions if these demands
are not met. Although a full law would be the ideal circumstance for the
reconquering of American monetary policy by those to whom it rightfully belongs,
any and all means available can and should be used.
2.) How to Use the
Federal Reserve to Jumpstart a Recovery
Essentially, there are three different types of economic
stimulus which involve government spending – Hot money (money printing,
quantitative easing, etc.), on-budget spending, and credit stimulus. It should
be noted that Austrian school economics proponents may attempt to argue that
their own version of economic stimulus (meaning austerity) may jumpstart a
recovery with no government spending at all. This idea involves mass
liquidation, deflation, and budget cutting. However, considering the history of
Austrian school economics and its proven failures in that regard, Austrian
school economics stand as antithetical to a modern prosperous society and leave
a trail of poverty, destruction, malnutrition, and stagnation in its wake.[2] Thus,
Austrian school economics will not be addressed in this article as a legitimate
source of an economic recovery in this article.
With that being said, the first method of economic stimulus
mentioned above – Hot money – has been widely criticized by many individuals on
both sides of the political paradigm due to the fact that such “stimulus” does
virtually nothing for Main Street while subsidizing and encouraging the risky
behavior of Wall Street. In addition, because the “hot money” approach involves
the extension of cheap credit to financial institutions, creation of debt, and
the creation of new money out of thin air which finds its way into the system,
inflation and the devaluation of currency necessarily occur. Taxation through
inflation is a direct result of money printing and the “hot money” approach as
is the ballooning of parasitical financial institutions as they feast on the
money handed to them on a silver platter.[3]
The second method of stimulus is the Keynesian application
of “on-budget” spending which involves the accumulation of public debt in order
to provide the funds for a stimulus program. This method is slightly better due
to the fact that government spending in infrastructure or other relevant
development programs does indeed create jobs and related industry. However,
on-budget stimulus is limited in what it is able to do by the fact that the
spending taking place must be acquired by taxation or borrowing. Over-burdening
the public with taxation and creating unsupportable debt (to private banks) is
the inevitable long-term result of such stimulus regardless of how many jobs it
creates in the meantime.[4]
A third method of stimulus, however, is much more capable of
creating an economic recovery. This is the method referred to as credit
stimulus. Credit stimulus, provided it is conducted by a nationalized central
bank, is capable of jumpstarting a recovery due to the fact that it does not
involve simply printing money and spending it into circulation nor does it involve
the creation of debt to private banks. Credit stimulus issued by a national
bank would not create a culture of unsupportable debt because the debt itself
would be held by an arm of the Federal government, an unlikely source of
foreclosure against the Federal, State, or local governments in the event of
lack of repayment, an unlikely circumstance to begin with.[5]
Indeed, trillions of dollars worth of credit was issued to
Wall Street during the course of the 2008 housing crisis. If credit from the
Federal Reserve and the U.S. Treasury was good enough for Wall Street, it is
good enough for Main Street. This, then, is the method which should be selected
to jumpstart an economic recovery after having nationalized the Federal Reserve.
3.) What credit
stimulus from a Nationalized Federal Reserve should be used for:
According to the American Society of Civil Engineers who
recently released its 2013
Report Card For America’s Infrastructure, estimates suggest that the United
States would need to invest $3.6
Trillion dollars in its infrastructure by 2020 simply to achieve the
overall ranking
of “good” which is represented as a B on the ASCE report card.
In addition, the innovation and leadership in regards to
scientific progress in which America once dominated is a feature that no longer
appears to exist domestically. In infrastructure, education, science, medicine,
and real economic activity (productivity), the United States is nothing more
than a shell of its former self. Yet this does not have to be the case nor does
it have to be the future for America. A nationalized Federal Reserve,
particularly together with a 1%
Wall Street Sales Tax to eliminate Federal, State, and local budget
deficits as well as fully finance the social safety net, education, and a true
program of universal healthcare, would be a tremendous step forward in creating
an environment of virtually full employment.
For this reason, Credit Stimulus can and should be used to
jumpstart a recovery first by means of repairing existing infrastructure and
building new infrastructural systems as will fit the needs of modern America.
This should be accomplished by a nationalized Federal Reserve acting as a truly
state-owned central bank buying up the bonds of states, regional projects, and
local governments for the specific purposes of rebuilding subway systems,
highway systems, water treatment facilities, railway systems (freight and
passenger), bridges, electricity and power production facilities, canals,
ports, sewage systems, telecommunications, libraries, hospitals, schools,
public and government buildings, as well as other relevant aspects of
infrastructure.
The terms of these bond purchases should be simple. First,
they should be predicated upon real improvement and creation of legitimate
infrastructure such as the projects mentioned above. No pork or pet projects. Second,
the interest rate of these bonds should be set at 0% so as to preclude any
usury between governments and to eliminate usurious forms of government and
public debt. Third, these bonds should be issued with a maturity date of 100
years, a type of bond commonly referred to as century bonds. This will allow for
reasonable “repayment” on a reasonable time scale with adjustments made for the
need of the government receiving the credit as the economic crisis may demand.
There should be no foreclosure or bankruptcy resulting from this extension of
credit.
A newly nationalized Federal Reserve should immediately
issue a tranche of $3.6 trillion of such credit to Federal, State, and local
governments as well as regional projects in order to upgrade current infrastructure
to a satisfactory level with subsequent tranches of $1 trillion to be issued as
needed after the first tranche of $3.6 trillion is expended. The goal in this
endeavor is not only to upgrade and improve the national infrastructure but to
create what amounts to full employment. The jobs provided by this credit
stimulus should be high wage and union pay scale.
Improving infrastructure to adequate levels, however, is not
the only potential use for the purchase of Federal, State, and local bonds as
the goal should obviously be to create new and more efficient, environmentally
friendly, and highly developed forms of infrastructure – be it in waste
treatment, power and electricity, construction, or transportation. For
instance, high-speed rail should be an immediate priority as should the
development of alternative means of power and electricity from a variety of
sources such as wind, solar, or some other source of power. In the meantime,
however, it is important to upgrade and safeguard those methods of power that
we currently maintain whether including water, nuclear, or coal.
Likewise, it is important to use such century bonds for the
funding of science drivers in each of these respective industries as well as
for the achievement of goals that are currently presented as unattainable in
the foreseeable future. Thus, in addition to the funding of development of
alternative and truly clean/free sources of energy and power, more efficient
means of transportation, and other improvements to existing infrastructure,
investments must be made in scientific discoveries regarding health and
medicine, space exploration and colonization, legitimately environmentally
friendly technologies and methods of production, and other laudable goals.
Clearly, as jobs rebuilding infrastructure and engaging in
scientific exploration and development begin to appear, subsequent industries
will no doubt begin to appear alongside them due to the increase in spending as
a result of the new high-wage jobs initially created by the infrastructure
investment.
With this in mind, it is important to understand that this
method of stimulus can and should also be used to stimulate not just
government-based jobs but also the private sector. This can be done by offering
low to no interest credit to the private sector manufacturers in all industries
who are willing to refurbish aging factories currently lying dormant and empty
all across the nation. Interest free and/or low-interest Federal credit should
be issued to those manufacturers and producers who are active or are willing to
become active in areas of tangible physical production. These productive jobs
should then be safeguarded by means of a protective tariff. In addition, such
credit must not only be available to large companies or individuals who are “thinking
big” but should be available all the way down to the local business owner –
restaurants, electricians, HVAC, mechanics, plumbing, etc. For far too long,
Wall Street has been the recipient of tax payer subsidies for risky financial
derivatives and financial services which produce absolutely nothing. It is time
for Wall Street to take a back seat to Main Street.
Lastly, a nationalized Federal Reserve would be able to
refinance student loans via the Department of Education and relevant agencies
that are currently burdening a large portion of an entire generation of
Americans. Education, particularly in the area of high skills, is a necessary
ingredient to a well-trained workforce of high wage workers. This is especially
true if the United States is to take the lead in scientific development. Furthermore,
if an entire generation is saddled with such unreasonable debt as to preclude
them from the ability to buy a house, support a family, and otherwise lead a
comfortable life, then the United States is on the fast track to creating its
first “lost generation.” By refinancing student loans through the Federal
Reserve at less than one percent or even zero percent interest, this generation
will be able to free itself of such debt and a new generation will be
encouraged and enabled to learn the skills that will be needed for the initiation
of a new economic system based on productivity.
While it is true that the implementation of the 1% Wall
Street Sales Tax or the Nationalization of the Federal Reserve is not the
ultimate goal of any resistance or revolution in and of itself, both policies
would rank as one of the major efforts needed to break the power of private
bankers over the general public and as one of the main efforts toward
rebuilding a working economy built upon production and human progress.
It is also true that power concedes nothing without a demand.
Unfortunately, the American people, activists, and the alternative media are
fast approaching a time that demands must be made if there will be any hope of
success.
No matter how important other issues may be to us - whether
they be privacy, civil liberties, the environment, or war and peace - it is well
-understood that the majority of the general public in any country can only be
rallied when the issues they face involve the amount of money they make and the
amount of food they eat. The cause of nationalizing the Federal Reserve is a
cause that affects virtually every other issue of concern held by activist
communities because it affects one of the most powerful tentacles of the ruling
elite – the control and influence wielded by Wall Street over the vast
population. There is no doubt that it affects the very basic economic concerns
held by the average American.
It is time to take back what rightfully belongs to the
people of the United States. It is time to Nationalize the Federal Reserve.
NOTE:
Much of the impetus behind the program and list of demands
contained in this article were inspired by the work undertaken by Webster Griffin Tarpley whose book, Surviving
The Cataclsym: Your Guide Through The Worst Financial Crisis In Human History
is an indispensable guide to understanding the current economic situation in
the United States and the solutions needed to fix it.
Likewise, an organization having arisen out of this same
mode of thought, the United Front
Against Austerity, has been instrumental in providing legitimate solutions
in terms of the American economic crisis.
Lastly, a new political party that strives to implement the
demands and programs enumerated in this article (among others), combined with a
respect for basic civil liberties and human rights, has arisen on the
American
political scene. The Tax Wall
Street Party is an attempt to provide a true alternative to the current
corrupt and illegitimate political paradigm of Democrats and Republicans. The
Tax Wall Street Party can be found at TaxWallStreetParty.org. Their program can be found here.
[1]
Griffin, G. Edward. The Creature From Jekyll Island: A Second Look At The
Federal Reserve. 3rd Edition. Amer Media. 1998. http://www.amazon.com/The-Creature-Jekyll-Island-Federal/dp/0912986212
[2]
Tarpley, Webster Griffin. Surviving The Cataclsym: Your Guide Through the Worst
Financial Crisis in Human History.” 3rd Edition. Progressive Press.
2011.
http://www.amazon.com/Surviving-Cataclysm-Through-Financial-History/dp/1615776001
[3]
Tarpley, Webster Griffin. Surviving The Cataclsym: Your Guide Through the Worst
Financial Crisis in Human History.” 3rd Edition. Progressive Press.
2011.
http://www.amazon.com/Surviving-Cataclysm-Through-Financial-History/dp/1615776001
[4]
Tarpley, Webster Griffin. Surviving The Cataclsym: Your Guide Through the Worst
Financial Crisis in Human History.” 3rd Edition. Progressive Press.
2011.
http://www.amazon.com/Surviving-Cataclysm-Through-Financial-History/dp/1615776001
[5]
Tarpley, Webster Griffin. Surviving The Cataclsym: Your Guide Through the Worst
Financial Crisis in Human History.” 3rd Edition. Progressive Press.
2011.
http://www.amazon.com/Surviving-Cataclysm-Through-Financial-History/dp/1615776001
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